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ECMC, county are close to settlement

Erie County and Erie County Medical Center officially acknowledged Wednesday what has been common knowledge -- that they have a proposal to settle a legal dispute over the hospital's annual subsidy from the county.

The two sides offered few details about the proposal after State Supreme Court Judge Joseph G. Makowski lifted a gag order that had prevented them from talking about it.

However, they did express doubt that the proposal can be translated into an actual deal by the end of the year, a deadline set by the judge.

The date is important because the proposal needs the approval of the County Legislature, whose leaders decided not to take up the issue before adjourning Friday for the year, according to county and medical center officials.

Legislature Chairman George A. Holt Jr., D-Buffalo, who will not return as chairman in 2006, could call a special session, but it is not known whether he would. He did not return telephone calls seeking comment Wednesday.

"We had come to an agreement between the administration and the hospital. It's fair to the taxpayers, fair to the hospital and fair to the hospital employees," County Executive Joel A. Giambra said. "The Legislature has decided, through its leadership, it is not interested in this right now. There is no appetite right now to move forward."

The county sold the medical center and Erie County Home in 2004 to Erie County Medical Center Corp., a public benefit corporation formed to help the hospital wean itself from taxpayer funds. As part of the deal, the county agreed to work out annual subsidies and to provide some money for equipment and renovations.

But the county's financial problems led officials to cut the 2005 operating subsidy from $29 million to $19 million and to reduce the proposed 2006 subsidy by $13.5 million, leaving about$6 million to cover the hospital's annual debt payment. The county also delayed payment on the capital-improvement funds.

The medical center challenged the actions, filing the lawsuit earlier this year.

In September, Makowski said Erie County is obligated to provide the medical center $18.4 million for capital improvements in 2004 and 2005.

Left unresolved was whether the county is required to provide an annual subsidy and how it should be determined. The judge delayed making a summary judgment while officials tried to hash out a settlement, said ECMC's attorney, Anthony J. Colucci III of the firm Colucci & Gallaher.

Unless the Legislature meets in special session, the matter will likely be decided by Makowski, officials said.

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